Embda Limited trading as Tribal Plumbers v Tropical Habitat Limited (2001) N2067

• Jurisdiction: Papua New Guinea
• Judge: Gavara–Nanu J
• Judgment Date: 07 May 2001
• Court: National Court
• Citation: (2001) N2067
• Year: 2001
• Judgement Number: N2067

Full Title: Embda Limited trading as Tribal Plumbers v Tropical Habitat Limited (2001) N2067

National Court: Gavara–Nanu J

Judgment Delivered: 7 May 2001

N2067

PAPUA NEW GUINEA

[In the National Court of Justice]

WS NO. 1117 OF 1999

Between:

EMBDA LIMITED Trading as

TRIBAL PLUMBERS

(Plaintiff)

And:

TROPICAL HABITAT LIIMTED

(Defendant)

WAIGANI: GAVARA- NANU, J

2001: 2nd, 3rd March & 7th May

Damages — Liquidated claims — Debts owed for services rendered — Particular business 'usage' adopted by the parties in doing business — Usage binding on the parties — Proof of usage.

Contract — Implied warranty — Breach of implied warranty — Damages open on facts and evidence pleaded and adduced — National Court Rules — O 8 r8 applicable.

Interests — Discretion of the Court — Judicial Proceedings (Interest on Debts and Damages Act, (Ch. No.52) S.1. — Not mandatory.

Costs — Discretion of the Court — Unreasonable conduct — Defence a sham — Abuse of process — Award of costs on Solicitor and Client basis appropriate.

Cases cited:

New Britain Entertainments -v- Webb, No. 89 of 1956

Brownett -v- Newton (1941) 64 CLR 439

The State -v- Konis Haha [1981] PNGLR 205

Dennis Wallbank & Jeanette Minifie -v- The State [1994] PNGLR 78

Lomax -v- Dankel [1982] 2 S.A.S.R 68

Collen -v- Wright (1857) 8 E1 & B1 647; 120 E.R 241

Gulf Provincial Government -v- Baimuru Trading Pty Ltd — N1794

Don Pomb Pullie Polye -v- Jimson Sauk Papaki — SC637

Counsel:

C. Okuk for the Plaintiff

J. Sirigoi for the Defendant

JUDGEMENT

GAVARA-NANU, J.: The Plaintiff is a small company, involved in plumbing business. It is claiming K11,833.59 in liquidated damages against the Defendant for services it says it rendered to the Defendant, which is a construction company, from 14th March 1997 to 7th September, 1998.

The Defendant has admitted through its lawyer in Court, owing K7,833.48 of the amount claimed by the Plaintiff, but denies that it owes the balance, which is K4,000.11. The Defendant says, it is not liable to pay the balance because, the amount is for the plumbing jobs the Plaintiff did for a Dr Lam and not for the Defendant. Dr Lam has refused to pay the amount, because he did not authorise the jobs. The Plaintiff has contended that the Defendant is liable to pay the balance of its claim because, it was engaged by the Defendant through its Managing Director, Mr Greg Neville, to do the jobs for Dr Lam.

The undisputed facts.

The evidence given by the Plaintiff through Mr Fred Sibona who is the Plaintiff's Maintenance Service Manager shows that there was a standard business practice adopted by the Plaintiff and the Defendant, whereby if and when the Defendant needed the Plaintiff's services, the Defendant would simply phone the Plaintiff's office and place it's job orders with the descriptions of the locations of the jobs to be done, and the Plaintiff, upon such instructions would go to the locations and do the jobs, and upon completion of the jobs, the Plaintiff would invoice the Defendant, who would pay the invoices. The Plaintiff would engage the Defendant's services in the same way, if and when it needed the Defendant's services. The Plaintiff says, the Defendant through Mr Neville, engaged its services for Dr Lam's plumbing jobs, in accordance with that practice. The parties referred to the practice as the 'understanding' between them when doing business with each other.

The Plaintiff produced sixteen invoice numbers in evidence for the various amounts it claims against the Defendant which make up the total amount of its claim. The balance of K4,000.11, which the Defendant disputes is made up of the amounts from two of those sixteen invoices, which are numbered 00004252, and 00004392 which were raised on 7th September 1998 for the respective amounts of K464.05 and K3,546.06.

The issue therefore is whether the Defendant is liable to pay this K4,000.11 to the Plaintiff.

The Plaintiff's case

The essence of the Plaintiffs case is that the business practice or the line of conduct generally adopted by the parties when dealing with each other in business was a 'usage' and thus was contractual in nature, which was binding on them, and hence, they were responsible for paying for each others services as contracting each other in such dealings, so the Defendant was and is liable to pay for the Plaintiffs services to Dr Lam.

The law

I find the decision in the pre-independence case of New Britain Entertainments -v- Webb, No. 89 of 1956, which is referred to in 'Pacific Contract Law' by Roebuck, Arwastava and Nonggor, at page 322, helpful in deciding this issue. In that case, Kelly J, was deciding the appeal, by the appellant against the decision of the Stipendiary Magistrate in Rabaul, where the learned Magistrate awarded £72.00 to the respondent for six weeks' holiday pay against the appellant. The respondent claimed against the appellant for work done by the respondent for the appellant at the appellant's request. The respondent contended that business houses in Rabaul paid six weeks holiday pay to the employees for every two years of work, therefore, in accordance with that 'practice', because she worked for two years, she was entitled to the six weeks' holiday pay of £72.00 from the appellant. The evidence on this claim before his Worship was only by way of oral evidence from the respondent. The Magistrate referred to the practice as 'custom' by the business houses in Rabaul. His Honour in allowing the appeal said:-

"On that evidence, the Stipendiary Magistrate found that it is the 'custom' of the business houses in Rabaul to pay six weeks' holiday pay at the completion of two years' work. No doubt, the Stipendiary Magistrate meant to use the word 'usage'. Custom is defined in Halsbury's Laws of England 3rd Ed. Vol.11 p.158 paras 294 and 295. Usage is defined ibid. p. 182 para 338.

The method of proof of usage is laid down in Halbury's Laws of England 3rd Ed. Vol. 11. Pp.199 and 200, paras 367 to 369 and more particularly at p.200 — "A usage is not proved merely by bringing the person interested in establishing its existence to give oral evidence of its existence unsupported by any other evidence".

Apart from that evidence of the respondent, there was no evidence before the Stipendiary Magistrate on which he could have found any agreement between the appellant and the respondent as to any fixed terms of holidays on which the respondent was entitled to be paid any holiday pay …." (my underlining).

The 'Words and Phrases Legally Defined 3rd Ed' at page 371 defines 'usage' in this way:-

"Usage may be broadly defined as a particular course of dealing or line of conduct general adopted by persons engaged in a particular department of business life, or more fully as a particular course of dealing or line of conduct which has acquired such notoriety, that where persons enter into contractual relationships in matters respecting the particular branch of business life where the usage is alleged to exist, those persons must be taken to have intended to follow that course of dealing or line of conduct, unless they have expressly or impliedly stipulated to the contrary, that is to say that a rule of conduct amounts to a usage if so generally known in the particular department of business life in which the case occurs that, unless expressly or impliedly excluded, it must be considered as forming part of the contract. (my underlining).

The Oxford Concise Dictionary 4th Ed., defines 'usage' as:–

"Habitual or customary practice, esp. as creating a right, obligation or standard".

Applying the principles in East New Britain Entertainments -v- Webb, (supra), the party asserting a particular business 'usage' has the onus to prove its existence. Oral evidence alone from the party asserting the existence of usage would not be sufficient. Evidence other than the oral evidence by the party asserting usage must be produced to prove the existence of usage. This is because of the contractual nature of the usage, which would bind the parties in any business dealings. In New Britain Entertainments -v- Webb (supra) Kelly J. held that oral evidence alone from the respondent was not enough to establish the existence of the 'usage' which could bind the appellant to pay the amount claimed by the respondent. His Honour said, in the absence of other evidence to support the respondent's oral evidence, the existence of the usage, was not proved.

I find the principles in New Britain Entertainments -v- Webb (supra), sound and relevant, for the case before me, I therefore respectfully adopt them, see also, The State -v- Konis Haha [1981] PNGLR 205 at page 211.

Application of the law to the facts of this case

(a) The...